Detailed kinetic analysis for the Cu(I)-catalyzed Kinugasa reaction forming beta-lactams has revealed an anomalous overall zero-order reaction profile, due to opposing positive and negative orders in nitrone and alkyne, respectively. Furthermore, the reaction displays a second-order dependence on the catalyst, confirming the critical involvement of a postulated bis-Cu complex. Finally, reaction progress analysis of multiple byproducts has allowed a new mechanism, involving a common ketene intermediate to be delineated. Our results demonstrate that beta-lactam synthesis through the Kinugasa reaction proceeds via a cascade involving (3 + 2) cycloaddition, (3 + 2) cycloreversion, and finally (2 + 2) cycloaddition. Our new mechanistic understanding has resulted in optimized reaction conditions to dramatically improve the yield of the target beta-lactams and provides the first consistent mechanistic model to account for the formation of all common byproducts of the Kinugasa reaction.